On a beautiful summer evening, we gathered at Starstruck Space in Soho to discuss planning ahead and business sale at our last campfire before the summer. Jim Whitaker (BCMS), Phil O’Brien (Concise Group) and Mark Lister (DeDiDa) joined our attendees to share their experiences of business sale transactions.

Jim began by sharing some examples of transactions that BCMS have led and advised upon within our industry, including exhibitions agencies, event management agencies and event software applications. Phil’s business was one of those clients: advised by Jim and BCMS, Phil and his fellow shareholders sold Concise to PSAV.

Jim then kicked discussion off with the big question: how do businesses get bought and sold? “Preparation,” he said, “is everything. The more preparation that can be done upfront, the smoother negotiations will be.”

“An overarching principle of M&A is risk and reward,” continued Jim. Even if you’re not thinking of selling for another five years, there’s plenty of groundwork you can be doing now to ensure that risk is as low as possible. This includes areas such as improving your Management Information, forecasting, and other financial analysis, strengthening your key senior personnel and management team, and ensuring all your housekeeping as a business is up to date. Planning ahead is also often a good excuse to make sure you are doing everything right in your business, and to be rigorous about it.

Jim shared BCMS’s four principles for sellers: preparation, he reemphasised, is critical. Be proactive – research is key. “When it comes to researching and finding the buyers, it’s often not the obvious people,” said Jim. Around 60% of their transactions in the media/events space are international with most of those coming from the US. Their next tip is to run a highly competitive process. BCMS, for example, design each process based on the client needs and the market. And finally, it’s vital that you deliver best value.

Think like a buyer,” advised Jim. Core value drivers that a buyer might be looking for include a strong brand reputation, good growth forecasts, a USP that is unique and well-define, little dependence on any exiting shareholders and a desirable customer base. As a seller, it’s about making sure you can show these things to a potential buyer. On the other side of that, Jim also points out things that would read as a red flag to a buyer, from declining growth to staff churn, a lack of prior investment and no clear USPs. Where these red flags do come up, Mark recommended getting ahead of these by outlining the reasons why. Tell the story, Mark and Jim agreed.

“Never meet the people that are leaving,” added Mark, as we are discussing what not to do when it comes to the pitching process. You don’t want a buyer to fall in love with a key shareholder who is going to leave. It confuses the process.

As a seller you also have the power to decide whose hands your business ends up in, so it’s important to think about what makes a good buyer. Financial resources, acquisitive track record and strategic fit are all things that you need to consider when looking for a buyer.

Be aware of valuation and multiples in opening conversations, Jim advised. It’s “definitely art, not science”. So be careful of offers that are heavy on the multiples as they can used ambiguously.

How long does it all take? BCMS advise that a full competitive process is likely to take around 9-12 months, although once again Jim emphasised the importance of preparation that begins earlier and ensures the business is in a good position for sale. “It’s a marathon not a sprint,” added Mark.

When deals do fall through it’s usually because, somewhere along the way, people haven’t been totally truthful. Due diligence will be done, and if it becomes clear that sellers have not been honest, buyers will walk away.

Getting the right specialist advice is vital too, from corporate finance advisors like BCMS to lawyers with a knowledge of business sale transactions, says Phil. These are the people who will guide you through this process and put in place what goes forwards, so it’s really important to make sure they are the right people.

Throughout the evening, both Mark and Phil shared their experiences of buying and selling businesses alongside Jim’s expertise. Our attendees also shared their personal journeys and concerns around planning ahead, asked questions of our presenters and exchanged experiences. Thank you to Jim, Mark and Phil for sharing their expertise and experiences for our members. If you are thinking about selling a business, get in touch with BCMS here. Or reach out to us at EVCOM who can put you in touch with Jim and the team.

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